How to Invest in JSE Top 40 Index

Roberto Rivero

The JSE Top 40 Index is one of two major stock indices composed of companies listed on the Johannesburg Stock Exchange. What are the JSE Top 40 companies in 2024? And how has the index performed in recent years? In this article, we will answer these questions and explain how to invest in JSE Top 40 and how to trade the index using CFDs. 

What Is the JSE Top 40 Index?

The JSE Top 40 Index, sometimes referred to as the FTSE/JSE Top 40 Index or the South Africa 40 Index, is a stock index which consists of the 40 largest companies listed on the Johannesburg Stock Exchange (JSE) by market capitalisation

Although its 40 constituents only represent around 10% of the approximately 400 companies listed on the JSE, combined they represent around 80% of its total market capitalisation. Therefore, the JSE Top 40 Index is generally considered a reliable reflection, or a benchmark, of the wider South African stock market. 

As well as the JSE Top 40 Index, there is also the JSE FTSE All Share Index which represents 99% of the full market capital value of the JSE, subject to minimum freefloat and liquidity requirements. 

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JSE Top 40 Companies List 2024

So, now we know what the JSE Top 40 Index is, what are the JSE Top 40 companies? In the table below, we have compiled a list of the index’s constituents in 2024.

JSE Top 40 Companies List 2024
Absa Group Limited
Anglo American
Anglo American Platinum
Anglogold Ashanti
Anheuser-Busch InBev
Aspen Pharmacare
BHP Group
BidCorp Ltd
Bidvest Group
British American Tobacco
Capitec Bank
Clicks Group
Discovery Ltd
Exarro Resources
Firstrand Limited
Glencore
Gold Fields
Growthpoint
Impala Platinum
Investec
Investec Ltd
Mondi Plc
Mr Price Group
MTN Group
MultiChoice Group
Naspers
Nedbank Group
NEPI Rockcastle
Northam Platinum Holdings
Old Mutual
Prosus
Reinet Investments
Remgro
RMB Holdings
Sanlam
Sasol
Shoprite
Standard Bank Group
Vodacom Group
Woolworths

If you are interested in how to invest in JSE Top 40, it is naturally a good idea to be aware of the companies which are in the index, as their performances drive its price.

However, the index’s constituents are weighted according to their market capitalisation, meaning that the companies with a larger market cap influence the overall index more than companies with a lower market cap, and vice versa. 

The top ten constituents account for around 55% of the total JSE Top 40 market cap, meaning that these ten companies have a greater effect on the direction of the index than all the others. Therefore, if considering investing in JSE Top 40 you should aim to be familiar with these ten companies, their performance and their future outlook.

Top 10 JSE Top 40 Constituents by Weight
Top 40 Index Weighting Sector Top 40 Index Weighting 
Naspers Software and Computer Services 10.53%
Anglo American Industrial Metals and Mining 10.42%
Firstrand Limited Banks 6.68%
Standard Bank Group Banks 5.05%
Gold Fields Precious Metals and Mining 4.44%
MTN Group Telecommunications Service Provider 3.78%
Prosus Software Computer Services 3.42%
Mondi General Industries 3.19%
Capitec Bank Holdings Ltd Banks 3.12%
Compagnie Financière Richemont Personal Goods 2.92%
Total - 53.54%

 Source: FTSE Russell – FTSE/JSE Top 40 Index Fact Sheet – 29 December 2023.

JSE Top 40 Performance

Below, we can see the JSE Top 40 index chart showing its long-term performance. 

In the ten-year period ending 31 December 2023, the JSE Top 40 Index produced an annualised total return of 8.92%. The table below shows the JSE Top 40 Index's total return in each of the last ten calendar years. 

JSE Top 40 Total Return
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
9.2% 7.5% -1.6% 23.1% -8.3% 12.4% 10.0% 28.4% 4.2% 9.0%

 Source: FTSE Russell – FTSE/JSE Top 40 Index Fact Sheet – 29 December 2023. 

How to Invest in JSE Top 40

So, how can you go about investing in JSE Top 40? 

Like any stock index, it is not possible to invest directly in the South Africa 40 Index. Nevertheless, there are still many ways for you to invest in the index. If you want to gain exposure to the entire index, you could choose to invest in a mutual fund or Exchange-Traded Fund (ETF) which passively tracks it. 

These types of index funds pool investor capital in order to purchase shares in all the companies listed in the JSE Top 40, meaning that you can gain exposure to the entire index with a single investment. 

Alternatively, if you are not interested in investing in all the JSE Top 40 companies, you could buy shares in the specific companies which you are most interested in. For example, if you wanted to build a portfolio based on the JSE Top 40 Index, you might choose to invest in the top ten constituents which we highlighted earlier. 

How to Trade JSE Top 40 Index

If you are wondering how to trade JSE Top 40 over a shorter time horizon, Contracts for Difference (CFDs) could be an option to consider. 

CFDs are a financial derivative product which represent a contract between two parties agreeing to exchange the difference in an asset’s price between the time the contract is opened and closed. 

CFDs allow traders to attempt to profit from both rising and falling markets, meaning that you can use CFDs if you are feeling either bullish or bearish on the JSE Top 40 Index. Furthermore, CFDs benefit from the use of leverage, which allows traders to open a larger position size with a smaller initial deposit.

Consequently, leverage can magnify a trader’s potential gains. However, it must be used with caution, as it can just as similarly magnify potential losses on a losing trade. 

Amongst the many different instruments which can be traded with Admirals using CFDs are a variety of stock indices, including the South Africa 40 Index. In order to start trading CFDs on the index, follow these steps: 

  • Open a Trade.MT5 account with Admirals and log in to the Dashboard
  • Click ‘Trade’ next to your account details to open the MetaTrader Web Terminal
  • Search for the South Africa 40 Index and open the price chart
  • Press ‘Create New Order’, enter the desired CFD volume and click ‘Buy’ or ‘Sell’ to send your order to the market!
Depicted: Admirals MetaTrader WebTraderSouth Africa 40 Index H1 Chart. Date Captured: 29 January 2024. Past performance is not a reliable indicator of future results.

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As well as individual stocks, you can trade CFDs on some of the most popular stock indices in the world, including the JSE Top 40 Index, FTSE 100 and S&P 500! Click the banner below to find out more and open an account today: 

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FAQ

What Is the Average Return of the JSE Top 40?

The JSE Top 40 Index produced an annualised total return of 8.92% in the ten-year period ending 31 December 2023.

What Is the Difference Between the All Share Index and the Top 40 Index?

The JSE All Share Index is composed of 129 stocks listed on the Johannesburg Stock Exchange (JSE) which account for 99% of the total market capitalisation of all ordinary securities listed on the exchange. Whereas, the JSE Top 40 Index consists of the largest 40 companies on the JSE by market cap.

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INFORMATION ABOUT ANALYTICAL MATERIALS:  

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:  

  1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
  3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
  4. The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
  5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
  6. Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
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